Port of Bellingham hit with restraining order after developer Harcourt files countersuit

Harcourt Developments, the Ireland-based company constructing three multi-million dollar residential condo buildings along Bellingham’s waterfront, has filed a lawsuit against the Port of Bellingham, alleging Port officials have threatened to call police and request trespassing citations be issued if Harcourt did not remove its equipment from Port property.

Harcourt’s lawsuit, filed April 4 in Whatcom County Superior Court, comes roughly a month after the development company was sued by the Port of Bellingham alleging it defaulted on its development contract.

Harcourt’s lawsuit seeks a temporary restraining order against the Port, alleging that the Port has attempted to bar the company from “certain portions of the Port’s property adjacent to and near the project areas (the “Licensed Area”)“ that Harcourt alleges to have been permitted to use for “the staging of materials, equipment, and portable office, as well as parking and marshalling” during construction of the condominium project, according to court documents.

The lawsuit is also seeking to compel the Port to proceed to court-ordered mediation, and if that fails, to arbitration, in which an arbiter would issue a decision on whether a permanent injunction should be granted against the Port, restricting them from contacting the Bellingham Police Department to issue trespass citations against Harcourt.

A Whatcom Superior Court judge granted a temporary restraining order April 8 barring the Port from contacting Bellingham police; requiring the Port to allow Harcourt to continue to use Port-owned property to store construction materials and equipment; and for the Port and Harcourt to proceed with a mandated dispute resolution process.

The temporary restraining order will remain in effect until the dispute resolution, or subsequent arbitration process, has been completed, according to court documents.

A review hearing on the temporary restraining order is set for 1:30 p.m. May 10.

The Port’s attorneys, with the firm CSD Attorneys At Law, declined to comment on the pending litigation when reached Wednesday afternoon by The Bellingham Herald.

The Herald has reached out to Harcourt’s attorneys for comment.

Use of property

Harcourt alleges that the use of this space by the company was agreed upon between both the Port and Harcourt as a necessary part of construction because the buildings are being constructed on a “zero-lot line, meaning the buildings abut or are very near the edge of Harcourt Residential’s property.”

Harcourt’s lawsuit alleges the company required an extension of its condominium project deadline and surrounding Port property use due to delays caused by “force majeure events” — circumstances outside of the company’s control — “including the wars in the Ukraine and Israel, floods, and industry labor shortages.”

An additional six-month delay was caused by the Port-required utility provider Corix not providing heating or hot water to the condominium units within its agreed-upon completion date and preventing Harcourt from obtaining a temporary certificate of occupancy, according to the lawsuit.

“Despite the delays caused by the Port-mandated utility provider, without prior warning and without ever providing Harcourt with the promised extension agreement, on February 23, 2024, the Port sent a letter to Harcourt Construction improperly alleging that Harcourt Construction’s continued use of the Licensed Area was an illegal trespass on the Port’s property on the basis that the License had expired,” the lawsuit states.

The Port told Harcourt to “remove all equipment and materials from the Licensed Area within two weeks and threatened to contact the Bellingham Police Department to issue criminal citations against Harcourt Construction if it did not comply with the Port’s demands,” documents state.

Harcourt alleges in the lawsuit that a temporary restraining order is needed because disallowing the company access to the licensed area would force the company to halt construction of the condominiums, which is already years behind schedule.

“Without immediate relief, the Port will preclude Harcourt from completing construction of the buildings on Harcourt’s property. This will cause Harcourt, its subcontractors and suppliers, and laborers working on the Project to suffer actual and substantial injury for which there is no adequate remedy at arbitration or law,” the lawsuit states.

To date, Harcourt has expended more than $40 million on the project and accepted deposits from 50 people for units in all three condominiums under construction, the lawsuit states.

“Harcourt has tried to work with the Port to avoid the halting of construction, but to date the Port has continued to threaten to breach the license and prevent Harcourt Construction from accessing the licensed area,” the lawsuit states.

Port sues Harcourt

The original lawsuit filed against Harcourt by the Port of Bellingham alleges that the company defaulted on its development contract, known as the Master Development Agreement (MDA). Harcourt asked for an extension of its development timeline, which the port denied due to the notice of default.

The port notified Harcourt on Oct. 20, 2023, that the company was found to be in eight individual contractual defaults, including failure to complete its first two residential buildings within the contract’s timeline and violation of required environmental standards.

Harcourt was originally selected in 2015 as the lead developer for about 19 acres of the Waterfront District but has lost future development rights for additional property there as a result of the defaults. The company was expected to complete its three residential buildings by the end of 2023, but now has no timeline for completion.

Harcourt has denied the Port’s default findings.

The Port and city of Bellingham have been working to redevelop a total of 237 acres on Bellingham’s central waterfront that was formerly a pulp and tissue mill. A Master Plan has been approved to create what the Port is calling ‘a vibrant, mixed-use neighborhood with new parks and trails and thousands of new jobs.’ The redevelopment is expected to occur in phases over the next several decades.